By Dow Jones Business News,
February 21, 2014, 01:43:00 AM EDT
By Cynthia Koons and Wayne Ma
HONG KONG-- Noble Energy Inc. has hired merger-advisory firm Lazard Ltd. to sell its majority stake in an oil field
it owns with Sinopec just off northeastern China, people familiar with the matter said, the latest in a string of asset
sales in the region.
One person familiar with the matter said the U.S. oil-and-gas producer could sell the stake for between $200
million and $300 million.
Noble Energy holds a 57% stake in the Chengdaoxi field, which began commercial operations in 2003 and currently
produces about 4,000 barrels a day of crude oil. State-controlled China Petroleum & Chemical Corp., known as Sinopec
Corp., holds the remaining stake in the field, which is classified as an onshore project because it is in waters less
than five meters deep.
Roc Oil Co., a medium-size Australian oil-and-gas producer, is one prospective bidder for Noble's stake, people
familiar with the matter said. Roc has experience exploring and developing oil fields of similar size in Bohai Bay. In
2006, it bought a minority stake in the Zhaodong block in Bohai Bay from U.S.-based Apache Corp. and continues to
explore and develop assets in the region. Roc said its share of output from its fields in Bohai Bay was about 4,000
barrels a day in the fourth quarter of 2013.
Roc isn't the only bidder for Noble's stake, which has attracted interest from a wide field that includes other
medium-size energy companies, people familiar with the matter said.
Noble said earlier this month in a statement that its production-sharing contract in China would expire in 2018 and
that it was negotiating to sell its Chinese assets. Noble is focused on horizontal-drilling operations in the U.S., as
well on offshore projects in the Gulf of Mexico, the Mediterranean and West Africa.
Noble's decision to sell its Chinese assets, which have declined in output from 6,000 barrels a day in 2003 and
represented 1.5% of total sales last year, follows a string of asset sales in the region as global energy companies
increasingly shed projects further afield to refocus on their home markets.
Anadarko Petroleum Corp., based outside Houston, sold its subsidiary in China for around $1.1 billion this week to
Hong Kong-listed Brightoil Petroleum Holdings Ltd. New York-based Hess Corp. agreed to sell its Indonesian business for
$1.3 billion to Indonesia's PT Pertamina and Thailand'sPTT Exploration & Production Co. in December. Houston-based
Newfield Exploration Co. sold its Malaysian business to SapuraKencana Petroleum Berhad for $898 million in October.
Not all the asset sales have been smooth. Newfield originally wanted to sell its offshore assets in China and its
assets in Malaysia as one package. However, Newfield was forced to hold on to its Chinese assets after bidders primarily
showed interest in those in Malaysia, people familiar with the process have said.
The potential for developing North America's vast shale-gas fields has caused globally diversified oil-and-gas
companies to rethink their overseas strategies. Huge discoveries in Louisiana, Texas, Arkansas and Pennsylvania have
made the U.S. an increasingly attractive target for investment dollars. The Obama administration also cleared the way
for broader natural-gas exports last year when it approved a $10 billion facility in Texas.
In 2010, U.S.-based Devon Energy Corp. sold its stake in a Chinese offshore oil field to Cnooc Ltd., China's
primary offshore energy producer, for $370 million. That deal was part of Devon's strategy to focus on developing assets
in North America. Devon said Wednesday that oil production grew 17% in the fourth quarter of last year, driven by its
rising output in North America.
Noble's major projects abroad are in Israel and Equatorial Guinea. This week, the company said it reached an around
$500 million deal to supply natural gas from an offshore Israel project to customers in Jordan.
Noble's net income in 2013 shrank to $978 million from $1.03 billion in 2012. Its fourth-quarter earnings fell 47%
on higher operating expenses attributed to sharply higher exploration costs.
Write to Cynthia Koons at email@example.com and Wayne Ma at firstname.lastname@example.org
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